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ortgage rates jumped yet again on Friday piling more pressure on anxious home owners and first time buyers.
The average rate on a two-year deal jumped to within a whisker of six per cent, up from 5.92 per cent to 5.98 per cent. On five-year fixes the average rate rose from 5.56 per cent to 5.62 per cent, according to latest figures from analysts Moneyfacts.
The vast majority of the 10 million home owners with mortgages are on fixed rates, mostly two and five-year deals. About 1.8 million expire this year and will have to be remortgaged at far higher rates. The Standard revealed on Thursday how London homeowners with a typical £350,000 loan face an £8,000 a year rise in their bills when they remortgage.
Renters also face a squeeze as landlords are saddled with higher rates on buy to let home mortgages. The average two-year fixed rate rose from 6.13 per cent on Thursday to 6.21 per cent on Friday, while the average five-year deal jumped from 6.13 per cent to 6.17 per cent.
The latest rises come at the end of a chaotic week in the mortgage market when rising gilt yields and a rush of demand from borrowers forced lenders to withdraw and reprice their deals.
On Friday a slew of banks and building societies announced deals being withdrawn or repriced. Nationwide and Progressive said their interest rates on some fixed rate deals would go up by as much as 0.55 per cent, while Skipton added up to 0.4 per cent.
The turmoil comes ahead of a key week for the economy with inflation figures on Wednesday and a decision from the Bank of England on its rate on Thursday. The Bank’s Monetary Policy Committee is thought likely to order a 13th consecutive rise in rates since December 2021, lifting the cost of borrowing from 4.5 per cent to a post financial crisis high of 4.75 per cent.
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